The new year appears to be giving a fresh start for US data with the numbers we have seen thus far turning out firmly, a far cry from the mixed performance in the last two weeks of 2010. While the Fed may have sounded cautiously optimistic it its latest FOMC minutes numbers out Wednesday have been impressive with the ADP Non-farm Payroll data coming out close to 3 times the consensus at 297,000 and the December ISM Non-Manufacturing Index also pulling out an impressive read of 57.1 courtesy of the Prices paid component which has jumped to 70.0 from 63.2. For financial markets this has meant a firm close for US Equity indices after sharp losses in pre-market trading while bond markets have retreated and commodities bounced. Given all this currency markets has seen a broad-based rally for the greenback the dollar index already seeing the price objective of its 4H double bottom break from 79.51 with indicators now suggesting we look for another try at the key 80.80 resistance. Going forward the strong US numbers should translate into a fair amount of buoyancy for Asian equity markets while among the major currencies we will look for markets to continue pricing in a strong read for Fridays official US jobs data. On this note that with the ADP results we already have forecasts for the official numbers already being adjusted higher though some analyst has called into question ADP’s predictive value. This said we have indeed seen weakness in the jobs component of both the Manufacturing and Non-manufacturing ISM data to support the analysts calls though this may be explained as a result of differing methodology.
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